Here are a few facts for anyone who is struggling to wade
their way through the multiple help guides on the government website about the
new Universal Credit (UC) state benefit that the government have been gradually
rolling out recently.
UC is the new single benefit that will gradually replace
most of the means-tested benefits including income-based Jobseeker's Allowance, tax credits
and Housing Benefit.
UC was introduced in 2013 in selected Jobcentre Plus areas known as
‘pathfinder areas’. Between February and April 2015 UC will be available in an
additional 151 Jobcentre Plus areas and even more will be added from May 2015.
The new areas are listed on the Gov.UK website. You can click here to see when
your area will be affected.
To work out how much UC an individual is entitled to Jobcentre Plus needs
to calculate how much income that individual receives. To do this they
calculate both earned income and unearned income. Unearned income includes
things like pensions, insurance payments, income from a trust and spousal
Under the current benefits system of tax credits both spousal and child maintenance
are disregarded when calculating entitlement. Whilst child maintenance will
continue to be disregarded for Universal Credit, spousal maintenance (along
with all other unearned income) will be deducted from your entitlement on a pound
for pound basis.
This will become increasingly important when considering the amount of a
financial settlement in divorce proceedings and may well mean the lower earning
spouse will want to negotiate a higher maintenance figure to account for the
loss of other benefits.
The new system will also take into account an individual’s capital, such as
savings. If your savings total more than £16,000 you will not be entitled to
UC. However, there are certain types of ‘capital’ that are ignored for UC
calculations such as personal possessions, business assets and your home if you
You can see that not everyone will qualify for UC. For example if you are
paying child maintenance you will not be able to claim UC and will instead have
to claim one of the existing benefits.
Universal Credit has yet to reach my area of Tunbridge Wells, Kent so not
many of my clients are currently affected. However, it looks likely to arrive
before long, and it may well have a profound effect on separating couples.
Alex Davies is the head of family law at Cripps of Kent and London. You can view his profile at http://www.cripps.co.uk/profile/alex-davies/ or contact him on +44 (0)1892 506326. Emma Clements is a trainee solicitor in the family team at Cripps. You can view her profile at http://www.cripps.co.uk/profile/emma-clements/